Increasing commodity prices, specially those of rhodium and palladium, which are used in catalysers to meet strict emission norms, are putting cost pressure on automobile makers, according to a senior official of Maruti Suzuki India.

The company, which had hiked prices of its vehicles in January, however is not planning to pass on the burden to consumers in the near future although it is keeping a close eye on its cost structure.

With the supply of semiconductors becoming a challenge for the automotive industry, Maruti Suzuki is also watching the situation closely although it will have normal supply this month.

"In commodities, prices have gone up dramatically this year, especially that of steel, and rhodium and palladium, which are used in catalysers of BS-VI vehicles.

"Demand across the world has gone up but its mining happens only in Russia and South Africa. There, the mining was much lesser because of the pandemic," Maruti Suzuki India Executive Director (Marketing & Sales) Shashank Srivastava told PTI.

Supply was less and global demand is very high because all Euro VI, BS-VI and China VI vehicles require catalysers, he said adding, "so, the demand has gone up, whereas supply is constant and 80 per cent of demand for rhodium and palladium comes from the auto industry."

When asked if the issue is as critical as that of semiconductor, he said, "for rhodium and palladium, supply is not an issue but price is a problem but in semiconductor supply is a problem."

Commenting on Maruti Suzuki's position with regards to semiconductor supplies, Srivastava said, "right now for semiconductors we don't have an issue. January was normal for us. February seems to be normal but there is a major semiconductor shortage in the auto industry. So, we are watching the situation very carefully. Right now we are not affected."

On whether the company plans to pass on the burden of increased rhodium and palladium prices to consumers, Srivastava replied in the negative stating the company had hiked vehicle prices in January because of increase in commodity prices.

"In fact all OEMs have increased prices largely because of the increase in commodity prices. We keep watching the cost structure, how the costs are evolving and take decisions accordingly.

Now we have to draw a fine line. We have to take care of the demand.